The UK has moved forward with plans to introduce a draft regulatory framework for cryptocurrency assets in early 2025.
The announcement was made at the City & Financial Global Tokenization Summit held in London on November 21, 2024. The timeline follows a delay caused by the general election earlier this year, which resulted in a change of government.
Treasury Economic Secretary Tulip Siddiq highlighted that the next framework would address various aspects of the crypto market, including stablecoins, staking services and cryptocurrencies in general. She emphasized a unified approach to regulation, noting that dealing with all aspects in one phase is a simpler approach.
Stablecoins, Siddiq explained, do not align well with existing regulations for payment services due to their distinct characteristics. Although stablecoin legislation has been under discussion since consultation documents were released in October 2023, it has never been planned until 2025 according to cointelegraph.com.
The same source reveals that another significant concern concerns the regulatory treatment of staking services. Industry players are wary of these services being classified as “collective investment schemes”, which could impose stricter rules. Addressing this point, Siddiq expressed the government’s intention to eliminate legal uncertainties.
Addressing Crypto Regulatory Challenges
The UK’s previous Conservative government aimed to position the country as a global cryptocurrency hub. However, the UK has often been seen as having a difficult regulatory landscape, partly attributed to the position of the Financial Conduct Authority (FCA), an independent regulator.
In contrast, the European Union Regulation on Markets in Crypto-Assets (MiCA) will come into full force by the end of this year, bringing regulatory clarity across EU member states. The UK’s similar lack of certainty could raise concerns about its competitiveness in attracting crypto businesses.
Although the Labor government has introduced some measures, including a September bill clarifying the legal status of non-fungible tokens (NFTs), cryptocurrencies and carbon credits as property, significant regulatory efforts remain underway .
